1640
PUBLIC LAW 86-866-8EPT. 2, 1968
[72 STAT
earlier taxable year). Such amount deemed paid or accrued in any year may be availed of only as a tax credit and not as a deduction and only if taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions. For purposes of this subsection, the terms 'second preceding taxable year' and 'first preceding taxable year' do not include any taxable year beginning before January 1, 1958.". 26 USC 6611.
(b) INTEREST ON OVERPAYMENTS.—Section 6611 (relating to interest
on overpayments) is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection: "(g)
26 USC 1015.
REFUND OF INCOME TAX CAUSED BY CARRYBACK OF FOREIGN
TAXES.—For purposes of subsection (a), if any overpayment of tax results from a carryback of tax paid or accrued to foreign countries or possessions of the United States, such overpayment shall be deemed not to have been paid or accrued prior to the close of the taxable year under this subtitle in which such taxes were in fact paid or accrued.", (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply only with respect to taxable years beginning after December 31, 1957. SEC. 43. BASIS OF PROPERTY ACQUIRED BY GIFT. (a) INCREASE FOR G I F T TAX PAID.—Section 1015 (relating to basis of property acquired by gifts and transfers in trust) is amended by adding at the end thereof the following new subsection: " (d) INCREASED BASIS FOR G I F T TAX PAID.— "(1) IN GENERAL.—If—
" (A) the property is acquired by gift on or after the date of the enactment of the Technical Amendments Act of 1958, the basis shall be the basis determined under subsection (a), increased (but not above the fair market value of the property at the time of the gift) by the amount of gift tax paid with respect to such gift, or " (B) the property was acquired by gift before the date of the enactment of the Technical Amendments Act of 1958 and has not been sold, exchanged, or otherwise disposed of before such date, the basis of the property shall be increased on such date by the amount of gift tax paid with respect to such gift, but such increase shall not exceed an amount equal to the amount by which the fair market value of the property at the time of the gift exceeded the basis of the property in the hands of the donor at the time of the gift. " (2) AMOUNT OF TAX PAID WITH RESPECT TO GIFT.—For purposes
26 USC 2503, ^'^'*
25^23 " ^ ^ ^^^^'
of paragraph (1), the amount of gift tax paid with respect to any gift is an amount which bears the same ratio to the amount of gift tax paid under chapter 12 with respect to all ^ifts made by the donor for the calendar year in which such gift is made as the amount of such gift bears to the taxable gifts (as defined in section 2503(a) but computed without the deduction allowed by section 2521) made by the donor during such calendar year. For purposes of the preceding sentence, the amount of any gift shall 1be the amount included with respect to such gift in determining (for the purposes of section 2503(a)) the total amount of gifts made during the calendar year, reduced by the amount of any deduction allowed with respect to such gift under section 2522 (relating to charitable deduction) or under section 2523 (relating to marital deduction). "(3)
26 USC 2513.
GIFTS TREATED AS MADE ONE-HALF BY EACH SPOUSE.—For
purposes of paragraph (1), where the donor and his spouse elected, under section 2513 to have the gift considered as made one-half by
�
